EXAMINATION OF MULTINATIONAL CORPORATE CAPITAL STRUCTURE DECISIONS IN ZIMBABWE

This study uses a balanced panel data set from 2000 to 2008. The objectives of this study are to; (i) synthesize the theory on multinational companies with the orthodox corporate finance theories (ii) analyse the explanatory power of some of the theories that have been proposed to explain variations in capital structures across firms and, (iii) empirically examine the major determinants of capital structure decisions of multinational corporations listed on the Zimbabwe Stock Exchange. It utilizes panel data regression analysis (fixed effects {within} estimator) to empirically examine the impact of different determinants on leverage. The general findings are that tax, tangibility and size have a significant positive relationship with debt ratio while the pay-out-ratio; non-debt-tax-shields and profitability have a significant negative relationship with debt ratio. The results are broadly consistent with theory.